Paul Sracic

Political Analyst, Non-resident Fellow @HudsonInstitute, US Politics, Trade, US/Japan relations. If you think I agree with you, you're probably wrong.

[Paul Sracic @pasracic]

If you want to gain a better understanding of President Trump and his voters, I'll be hosting @dcexaminer and @washingtonpost columnist @ZitoSalena at the @HudsonInstitute to discuss her new book, Butler: The Untold Story of the Near Assassination of Donald Trump and the Fight for America’s Heartland. https://t.co/JNDILsWhmW

[Paul Sracic @pasracic]

@SeanTrende Right about the time we stopped electing presidents from Ohio.

[Paul Sracic @pasracic]

"when one’s comparative advantage is cheap labour and repression, it’s impossible to make that model work anywhere that doesn’t abide the same norms. This limits Chinese corporate expansion to jurisdictions with poor worker protections and standards, or non democracies."

[Izabella Kaminska @izakaminska]

The below story about Chinese tech involution is really insightful. I think it perfectly explains why China has had such difficulty reinvesting capital into the West (beyond purely financial assets or assets it wants to strategically sabotage).

Chinese FDI fell quite sharply post 2018 and it’s not just because Western countries became more wary of Chinese control and influence.

The documentary ‘American Factory’ perfectly illustrated the beginnings of the involution problem. The Chinese factory model (when powered by cheap exploited labour) simply can’t be replicated competitively in the West. At least, not without making the West visibly poorer, something that would likely trigger a political backlash.

The documentary tracks the successive attempts by the Chinese owners to block American unionisation to protect profitability. The Chinese managers are also regularly bewildered by American labour norms.

But the reason their investments eventually fail has little to do with Americans being lazy or overly unionised. On the contrary, it’s because when one’s comparative advantage is cheap labour and repression, it’s impossible to make that model work anywhere that doesn’t abide the same norms. This limits Chinese corporate expansion to jurisdictions with poor worker protections and standards, or non democracies.

This is why China’s American investments were eventually abandoned in favor of BRI countries: jurisdictions where China had more clout and influence over local governments and thus greater ability to run exploitative models. It also helped that these populations were generally poorer and had to take terms as presented.

But even that strategy is becoming increasingly politically contentious.

This has left China with no choice but to compete technologically. After all, the only alternatives at this point are: 1) bankrupting its primary customer and trade partner, aka the force that powers what growth it has, 2) writing off the wealth it thought it had on grounds it is no longer materialisable, a move that essentially locks its own people into exploitative conditions for the long term or 3) annexing foreign countries so that foreign populations can be forced to work in exploitative conditions instead. Aka actual old school colonial imperialism.

So far China is opting for the technological path.

But as the below story illustrates, the more China gives up on using its true comparative advantage (large cheap workforces) in favor of technological advances, the more likely it is to run into involution. This is because without a natural input cost advantage it has to compete on actual merit and non human labour cost control.

The problem for China is that simply shifting towards automation and technology is no guarantee of success, especially if the overall operation is far more capital or energy intensive than the old way of doing things. It might not even guarantee greater efficiency, since foreign competition will no longer be put off by an inability to emulate exploitative working practices their systems won’t tolerate. On the contrary China will now be the one constrained by its own inability to adopt Western practices, notably the art of yielding to consumer feedback and power, cost control and respect for hard budget constraints.

[Edward Longe, Ph.D @EdwardLonge]

Another politician rails against data centers and AI while running their campaign on both. The self-awareness gap is a wonder of modern infrastructure.

[Nate Silver @NateSilver538]

Like honestly "it's going to take us several weeks to tell you who won the election" is failed state shit and should be much more stigmatized.

[Paul Sracic @pasracic]

@AndrewJTobias @darreldrowland What's the "cost" in tax revenue to Ohio if the data center is built in another state?

[Paul Sracic @pasracic]

@TheTNHoller @ronnychieng Imagine how much better this speech would have been had Ronny redrafted it after using AI to provide a steelman argument on the other side.

[Paul Sracic @pasracic]

💯

[DailyPatriot @AdamScottMiller]

Why?

If tax breaks get data center operators to build in Ohio, then it’s worth it.

If disallowing tax breaks means they chose another state, that’s even more money Ohio loses out on.

Tax breaks isn’t a “we lost money” considering it still brings in net revenue over the tax breaks term.

It’s not Ohio wasting money. It’s Ohio ensuring money, jobs, infrastructure and the related ecosystem sets up shop in Ohio.

If you want to change how those data centers are to procure water and energy, that’s a fair argument to be had.

But acting like “tax breaks cost Ohio money” is dishonest and lazy

Industries get tax breaks all the time. The only different here is data centers generate an enormous amount of revenue so the scale of “tax revenue not paid to Ohio” scales higher but still proportional to the revenue output of the industry.

Stop trying to squash innovation for short term political points and solve the actual issues that matter.

Every data center operator that wants to build should be judged in a vacuum and decisions of tax break, the terms of the tax break, or no tax break at all is based on each unique situation and the needs of Ohio at the time.

Blanket bans are lazy, dumb and only restrict future options for Ohio and its people

[Trevor Tomesh ☕ @realDrTT]

This one’s a BANGER!

“When subsidiarity is not linked to solidarity, it ends up becoming merely
the protection of particular interests; when solidarity is not supported by
subsidiarity, it degenerates into a form of welfare that does not foster
responsibility”

pp. 73 #MagnificaHumanitas

[Pope Leo XIV @Pontifex]

In the era of #ArtificialIntelligence, when human dignity is threatened by new forms of dehumanization, ours is the pressing duty to remain profoundly human. We must lovingly safeguard the grandeur of humanity bestowed upon us and revealed in its fullness in Christ, the splendor of which no machine can ever replace. #MagnificaHumanitas
https://t.co/6i9MWs6LJl

[Demetri @AsiaLens]

Check out our latest #scoop 👇

(With @leahyjoseph & @urbandirt)

[Paul Sracic @pasracic]

@ClarenceMaximus An important distinction should be made between statutory interpretation, where the concept of "legislative silence" supports strong adherence to precedent, and constitutional interpretation, where it's much more difficult for the "legislators" to speak. See Edward Levi.

[Jawwwn @jawwwn_]

.@PalmerLuckey: "Patents are Chinese instruction manuals" and we need to reinvent the US patent system:

"Stop patenting everything."

"The Founding Fathers never predicted a world where you'd have a globalized economy, and the entire patent office could be downloaded every single morning, ripped off, and then used to fight a war against you."

" We need to really fundamentally revisit the patent system."

"I think we need to massively expand the national security patent process. You can obtain a classified patent. You can get a patent on something that you are not allowed to disclose to anyone, but you still maintain the exclusivity on those rights."

" We need to massively expand that program."

Via @HooverInst

[Paul Sracic @pasracic]

@mcuban @MarkGabriele22 @DrDiGiorgio It's actually worse than this. We expect our brightest young people to accumulate hundreds of thousands in debt, then spend multiple years in low paying residencies to become primary care or pediatric doctors who even earn less than almost all other physicians.

[IndependentDocX @DocLibertarian]

Dying from pneumonia is not “always preventable.” A bad cough can turn into life threatening pneumonia in hours. Most coughing does not even need treatment in healthy people. This is why lawyers get rich on the backs of doctors who couldn’t predict the future.

[Sean T at RCP @SeanTrende]

If nothing else, today I am letting myself eat all the things and not feel guilty about it!

[Paul Sracic @pasracic]

@SeanTrende What an absolutely beautiful piece, Sean. Thank you for sharing this with all of us.

[Caroline Wren @CarolineWren]

Friendly reminder: here was every public poll of the 2020 U.S. Senate race in Maine….

[Henry Gao @henrysgao]

Another great episode by @ChadBown & @arvindsubraman, which confirmed what I wrote two weeks ago: the biggest problem is that after 50 years of development, China is not moving up the ladder, but instead seeks to dominate every rung of it.

The only part where I disagree is the proposed solution. It would be naive to assume that China would willingly give up certain sectors as a gesture of goodwill — partly because many of these low-value sectors are major sources of tax revenue for particular cities, and partly because China still faces a massive unemployment problem.

Instead, as I’ve long argued, the best path for other developing countries is to join reciprocal trade agreements with the US and simply blame the US for forcing them to take complementary actions against China under the economic security chapters.

In the long run, this serves China's interest as well because it is always better to have trade wars than real wars.

[Gabriella Hoffman @Gabby_Hoffman]

Closed-loop cooling in data centers DOESN'T use municipal drinking water. Local drinking supply is therefore unaffected.

Where was this water sample was sourced from!?

The Congresswoman is the key House author of the Green New Deal resolution. Be skeptical of her performative gestures.

[Paul Sracic @pasracic]

@drvannostril @geeta_minocha Proctor and Gamble? Goodyear?